ATLANTA -- The number of lawsuits seeking to prevent The Coca-Cola Co. from extracting Glac aau Vitaminwater from small distributors to hand it to its own bottlers is growing, reported The Wall Street Journal.
On August 31, B&E Juices Inc., a small beverage distributor in Bridgeport, Conn., filed a lawsuit seeking an injunction to stop Energy Brands Inc., the Whitestone, N.Y., maker of Glac aau brands and a unit of Coca-Cola, from terminating its contract to distribute Vitaminwater and other Glac aau drinks.
Now, four other [image-nocss] small distributors of Glac aau brands have followed in the footsteps of B&E, the report said. J&M Sales Co., Torrington, Conn.; Briar's USA Inc., South Brunswick, N.J.; Canada Dry Bottling Co. of Asbury Park, Neptune, N.J.; and Fischer Thompson Beverages Inc., Flanders, N.J., have each filed lawsuits against Energy Brands to prevent termination of their contracts to distribute Glac aau brands.
The Briar's lawsuit, filed in U.S. District Court in Trenton, N.J., also names Coca-Cola and its biggest bottler, Coca-Cola Enterprises Inc., as defendants, said the report. The distributors claim their contracts cannot be terminated under franchise laws in their respective states.
A Glac aau spokesperson declined to comment on the lawsuits. But, she told the Journal, We are committed to continue to work with our current distributors to fulfill all of our contractual obligations and successfully transfer distribution rights.
A Coke spokesperson declined to comment, and a CCE spokesperson told the newspaper that he could not comment because he had not seen the lawsuit.
After acquiring Energy Brands for $4.1 billion in June, Coca-Cola said it aims to increase sales of Glac aau brands by channeling as much as 65% of the drinks' estimated sales volume into its massive network of U.S. bottlers. That means leaving behind the distributors who worked closely with Glac aau to turn its Vitaminwater and other brands into a cult drink. Coca-Cola is leaving its new brand with large distributors that cover its two biggest markets: New York City and Los Angeles.
Glac aau's 2006 revenue was $315 million and volume totaled 56 million unit cases, representing 87% volume growth over 2005, according to the report, citing Beverage Digest.
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